9911796707
TMI Blog2016 (10) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... the return of income declaring nil income after claiming deduction of Rs. 58.58 lacs (rounded off) under section 80P(2) of the Income Tax Act ("the Act" for short). The Assessing Officer took such return in scrutiny. He passed the order of assessment under section 143(3) of the Act on 12.5.2008 determining nil income of the assessee by allowing deduction under section 80P(2) of the Act. 3. To reopen such assessment, he issued the impugned notice. To do so, he had recorded the following reasons : "(1) In this case the assessee filed its return of income on 29.10.2000 declaring total income at Rs. NIL after claiming deduction of Rs. 58,58,153/u/ s. 80P(2)(a) of the Act. The assessment was finalized u/s.143(3) of the Act on 12.05.2008 deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further you are required to produce these persons for identification as you have not provided detail of name address, PAN no. etc. In case of failure, the amount of Rs. 45 lacs being the FDRs in the name of so called 250 persons will be added as unexplained cash credit in the hands of bank u/s. 68." (4) The assessee bank vide letter dated 22/12/2009 submitted : With reference to the captioned subject, we are submitting herewith following details/explanations as desired by your honour during the course of assessment proceeding vide Letter no. DCIT/CIT11/ 143(2)/BMC/0910 dated 18.12.2009 which is received on 21.12.2009 at 02:30 PM. As regards to the details required by your honour in respect of Name, Addresses, PAN No. etc for the Depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als on record, we find that while assessing the petitioner's return for the assessment year 2007-2008, the Assessing Officer noticed that the Reserve Bank of India had imposed penalty of Rs. 5 lacs on the assessee bank on the ground that the bank had opened 250 fixed deposit accounts on 15th and 16th November, 2005 in various names without properly verifying their business activities or obtaining requisite documents. Such accounts were opened merely based on introduction by existing account holders. Bank had not observed the norms of Reserve Bank of India. The Assessing Officer confronted the assessee with such developments. He pointed out that in such 250 accounts, amount of Rs. 18,000/each was credited, totalling to Rs. 45 lacs. He ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Since the amount of Rs. 18,000/in each of the 250 accounts had come from M/s. Radha Finance, addition in hands of the bank therefore, under section 68 should not be made. Thus, though an additional ground raised by the assessee was that in any case the income did not pertain to the assessment year 20072008, the Commissioner did not proceed on such basis. He simply set aside the addition made by the Assessing Officer on the ground that section 68 of the Act could not be invoked in facts of the case. 10. Revenue carried the matter in appeal before the Tribunal. The Tribunal by the judgement dated 3.7.2015 rejected the Revenue's appeal. The Tribunal made the following observations : "6. Heard both sides. Records perused. It is eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank for not following the Reserve Bank of India requirements in the process of opening such bank accounts. 12. For two reasons, the impugned notice must be set aside. Firstly, the Assessing Officer had tried to tax the income in the hands of the assessee bank for the assessment year 2007-2008. This order was set aside by the Commissioner(Appeals) on merits holding that section 68 of the Act could not be invoked. Before the Commissioner(Appeals), the question was not whether the income would be taxable in the year 2006-2007 or 2007-2008. Plain question was whether the order of assessment invoking section 68 of the Act in case of the bank was proper or not. That being the question, the Assessing Officer cannot without there being anything f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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